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Rising uncertainties, low inflation move BOK to freeze policy rate: minutes

17:29 February 12, 2019

SEOUL, Feb. 12 (Yonhap) -- Rising uncertainties at home and abroad and low inflation pressure were major concerns and issues at the monetary policy meeting last month, according to minutes from the Bank of Korea (BOK) on Tuesday.

The seven-member monetary policy committee unanimously decided to leave South Korea's base rate steady at 1.75 percent at the year's first rate-setting meeting held on Jan. 24.

At the gathering, the board also cut its 2019 growth forecast 0.1 percentage point to 2.6 percent, citing sluggish corporate investment. The South Korean economy grew 2.7 percent in 2018.

"The South Korean economy is facing a negative external environment, and the inflation pressure remains feeble," a BOK member was quoted as saying.

He cited that the intensifying trade disputes between the United States and China and signs of a slowdown in world trade and the Chinese economy were feared to impact Asia's fourth-largest economy.

"Consumer prices have been slowing down to the mid-1 percent level as some one-off factors diminished," another member said. "Given sluggish employment and slowing economic activities, the core inflation is unlikely to turn around in the near future."

South Korea's consumer price index rose 1.5 percent for 2018, down from the previous year's 1.9 percent. In December, the figure came to 1.3 percent, and it dropped to 0.8 percent in January

The BOK has set its target inflation rate at 2.0 percent.

The monetary policy board meeting of the Bank of Korea (BOK) takes place at the BOK's headquarters in Seoul on Jan. 24, 2019. (Yonhap)


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